PayPal Halts Personal Payment Transactions From And To India
PayPal isn’t working properly in India. eBay’s electronic payment juggernaut appears to be blocking personal transactions to or from accounts of India-based users. It is reversing personal transactions; transactions involving businesses are still allowed.
An understandable uproar today as personal account holders resident in India have been hopefully temporarily cut off by PayPal. I wasn't even aware that PayPal was relatively integrated with the Indian banking system which I am impressed about. But this does not surprise me.
Reading through the comments it looks like it is the Royal Bank of India the central bank who are behind it.
This is not the first time this has happened. The RBI famously declared E-Gold illegal.
TIt has been brought to the notice of the Reserve Bank of India that an impression is sought to be created among the members of public by some agencies/persons that transactions involving "e-gold", purportedly an electronic currency, are freely permitted in India and that "e-gold" has the status of a foreign currency. The Reserve Bank has also come across a recent pamphlet on the subject, circulated along with a newspaper, which states that non-resident Indians use "e-gold" to send remittances into India.
The Reserve Bank clarifies for the information of public that "e-gold" is not a currency of any sovereign state. Use of "e-gold" in any transaction is violative of current regulations in force in India. Members of the public, banks, money changers and other financial institutions are, therefore, cautioned against the use of "e-gold" as a currency in their transactions.
India has foreign exchange limitations. From what I was able to find quickly private citizens are limited to taking out $10,000/y. This is almost certainly why they were banned.
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